Friday, February 11, 2011

The American Health Care Boondoggle

   Enactment of ObamaCare has been called “a historic moment in U.S. social policy.”  Elenora E. Connors and Lawrence O. Gostin of the Georgetown University Law Center write that “Like Medicare and Social Security, which were highly contested before enactment, national health insurance reform hopefully, will, in time, become part of the social structure.”1 After forty-five years, there are whole generations of people who have never known a time in their lives when Medicare did not exist.  It is easy to look back on the past with a nostalgic view and see Medicare as being one of the glories of the Johnson Administration and something which has been a major success from the beginning.  However, is that true?
    When President Lyndon B. Johnson gave a speech, after Medicare has been in effect for about six or seven months, stating that the program was an unqualified success, the facts indicated otherwise.  Medicare was a mess. Hospitals were overfilled with elderly patients who, once admitted, would not go home.  This caused a delay in the admission of many others.  In response, doctors were loaded down with red tape, rules, and regulations for patients over the age of 65 which did not apply to younger patients.  The absurdity was that a physician could take care of other members of the family the way he always did; keeping good records and operative reports.  However, the minute a patient passed the age of 65, the number of quadruplicate forms multiplied, and much more unnecessary, time-consuming work was required.2
  Edward R. Annis, M.D., past president of the American Medical Association, spoke about the response of the AMA to these changes.  He said that had the AMA been more militant, they would have told the communications media that the President was misinformed.  Perhaps he was so busy and preoccupied with the Vietnam War that he just took what his speechwriters gave him, and they were either misinformed or deliberately mislead the American people.  The AMA could have said, “The waste and red tape and delay and bureaucracy, and unnecessary, arbitrary rules and regulations are complicating a program that was oversold and underfinanced.”  This would have gotten coverage because it was controversial.  Then people would have sought out the facts.  Instead, the AMA policy was, “We do not answer them.”  He was told that the AMA turned down an invitation to participate in a program in which Wilbur Cohen spoke on behalf of the Administration.  Millions of people heard only one side of the story. 
   At the time there was a comment made by an administration official that the problem with Medicare had less to do with the program itself and more to do with “stubborn doctors”.  Robert Ball, who was then Commissioner of the Social Security Administration, while blaming doctors for any problems, repeated the statement that Medicare was an unqualified success.  From the bureaucrat’s standpoint, it was.  There were lots of rules, regulations, and forms, meaning lots of employees to control.  With more employees, you need more lieutenants, and with more lieutenants, more captains.  It was building the bureaucracy ‘empire’.  As Ball explained to National Public Radio, his agency had to expand to about 8,000 new employees within a very short time.  Dr. Annis was asked to follow Mr. Ball on the NPR segment, and he responded with the AMA’s position that Medicare was not an unqualified success.  
   The idea of a national health insurance plan was actually begun during the Truman Administration.  In a 2005 interview on NPR, for the fortieth anniversary of Medicare, Robert Ball explained the history of the idea of Medicare. He said, “Well, originally, everyone who was for Medicare as it developed had originally been for a national health insurance plan, covering everybody. That goes back to the Truman Administration.  However, when we could not get anywhere with that, we backed up and said, ‘Well, what group could we cover? What could we get?’ The elderly were selected, really, because they were a group that was politically easy to get—or easier to get, I should say.”3 
   What was the position of the AMA on medical care for the elderly prior to the passage of Medicare?  The AMA believed that anyone in this nation who needed medical care should have it when they needed it for as long as they needed it, whether they could pay for it or not. They opposed the program that would put a tax on younger workers of America to pay for everybody just because they had a birthday, millionaires as well as paupers.  The Supreme Court was very definite in its ruling that Medicare was not an insurance program, but rather a tax on one segment of the population to benefit another. The AMA supported the Kerr-Mills bill, signed by President Dwight D. Eisenhower (1890-1969) just before he left office, which provided Medicare-like coverage for elderly people with little or no income.  Eisenhower would not go along with the Wagner-Murray-Dingell bill, which would have made health insurance a part of Social Security, saying that such an idea would lead to socialized medicine.
   Despite efforts of employees in the United States Department of Health, Education, and Welfare (HEW) to sabotage it, Kerr-Mills was being implemented in thirty nine states during the Kennedy Administration. 
   What part did Dr. Annis play in AMA’s opposition to Medicare?  The King-Anderson bill, which was basically Medicare, was up for consideration.  He was not even an officer of the AMA at the time—he had not yet even been to his first meeting.  However, the AMA wanted him to debate Senator Hubert H. Humphrey (D-MN) and later Walter Reuther, President of the AFL-CIO.  Before he debated Humphrey, NBC called the AMA and asked, “Who is this guy? We cannot have a nobody debating a United States Senator.”  So NBC gave him the title of chairman of the AMA speaker’s bureau.
   The AMA was unable to get through the appointment secretary to make an appointment to meet President John F. Kennedy (1917-1963).  Through the intercession of Dr. Annis’ friend, Senator George Smathers (D-FL), top AMA officials, president Leonard Larsen, chief executive officer Bing Blasingame, and board chairman Hugh Hussey were invited for a private audience in the Oval Office and they asked Dr. Annis to come along.  Dr. Annis presented the AMA’s position, and President Kennedy said that he would not argue with Dr. Annis about it; however, he wanted Dr. Annis to debate HEW Secretary Abraham Ribicoff---who never agreed to do it. 
   Three weeks later President Kennedy spoke at Madison Square Garden in New York City before 20,000 senior citizens.  The speech he gave, which was televised gratis on all three networks, came about through Walter Reuther and Wilbur Cohen of HEW, who admitted supporting Medicare as part of Social Security.  Kennedy, however, did not mention King-Anderson but simply said that America would be hearing from the doctors. Reuther and Cohen were extremely disappointed.  They expected Kennedy to pave to way for passage of King-Anderson.  The next morning, the New York newspapers said it was the worst speech he had ever given, and a labor leader said, “We expected oil from the machinery of Medicare, and all we got was a dash of cold water.” The networks refused to give the AMA time to respond, but the AMA paid NBC for half an hour two days later, and Dr. Annis addressed the empty seats—and a nationwide television audience.
   Organized opposition to the bill increased significantly after this, and the bill was defeated—for the moment. 
   The AMA nearly won by defeating King-Anderson while Kennedy was still in office. One day before the vote was taken, Senator Smathers called Dr. Annis, who had earlier been elected president of the AMA at their House of Delegates meeting in Chicago, and said, “Ed, it will be close, but in the absence of any indicated support from President Kennedy, I feel sure that we will win.”  His prediction came true twenty four hours later. 
    Dr. Annis testified before the House Ways and Means Committee on November 21, 1963.  That testimony turned out to be irrelevant.  While he was still in Washington, D.C., he received news that President Kennedy had been assassinated in Dallas. 
    President Lyndon Johnson was determined that Medicare would pass—and that all seniors would be part of it.  That is probably why he wanted it to be part of Social Security. 
    How did seniors respond to the new program?  In the case of Dr. Annis’ mother and her friends in Michigan, they wanted to keep their Blue Cross/Blue Shield benefits and did not sign up for Medicare.  Eventually, they each received a letter stating that their insurance policies would be cancelled at the end of the month.  They asked where they could get insurance and were told, “Nowhere”. They were forced to take the government program.  When he was told that millions were not taking the program, President Johnson became angry.  He called the insurance companies and said, “I want you to stop insuring these people.  I want this program to work.”  So, the dictator had gotten his way.
   Why did the AMA choose not to fight against implementation of Medicare when they had the chance?  Dr. Francis Davis, editor of the now defunct journal Private Practice, tried to organize a special session of the AMA House of Delegates to encourage physicians to refuse to participate in Medicare.  Many physicians responded that although they did not like the legislation, there was no way that doctors would stop taking care of patients.  This attitude was the reason that the effort to oppose participation in Medicare never really got a good start. For years, Dr. Annis argued against the go-along-to-get-along position, but had no influence on the AMA’s decision.  AMA officials told him, “It is now the law, and at the moment we just have to go along with it.” 
   He agreed with the AMA tenets.  The difference was that too many physicians, in his opinion, took the attitude that “if we are good doctors and we take care of patients, everybody will be good to us.”  Physicians needed to be realists then, and they need to be realists now, and recognize that they were, and are, living in an age of propaganda.  If physicians do not constantly put their position in front of the people they will wonder, “Are these doctors just against things or do they have a reason for their position?” 
   Dr. Annis agrees with Thomas Jefferson, who said, “Given the facts, people make sound judgments.”  He disagreed with the AMA House of Delegates leaders, not on principle, but on the question of whether they should stay within their very reserved professional selves or get into the public arena.  He believes that the decision was ultimately made for physicians.  They are in the public arena, like it or not, because when they are accused and held up to public scrutiny, they need to answer, or people will assume that they cannot.
   How does a former AMA president respond to the claim that Medicare greatly benefited the lives and health of seniors?  Since Medicare, twelve years have been added to the lifespan of seniors—because of clinical research and awesome new tools, such as computed tomography. However, Medicare did not bring about those developments.  They did, in fact, add to costs, and the Congress decided that a business approach was needed to control the costs.  This resulted in managed care.  There is persuasive evidence that managed care has created more multimillionaire CEOs than almost any other segment of the economy, except for the avaricious trial bar. (Note that there are over 230 lawyers in Congress). The multi-million-dollar salaries of executives divert funds used to pay doctors and hospitals—an unintended consequence of Medicare.4
   The problems with Medicare continue:  In 2002, the General Accounting Office (GAO), now known as the Government Accountability Office, published a study revealing that 85 percent of the time Medicare customer service representatives (CSRs) gave the wrong answer to questions posed by physicians regarding the proper way to bill Medicare so as to obtain payment.5 The Centers for Medicare and Medicaid Services (CMS) promised to take steps to remedy the problem.
   A new study was conducted by the GAO in 2004 which found that 96 percent of the time, Medicare CSRs gave the wrong answer to questions posed by physicians regarding the proper way to bill Medicare so as to obtain payment.6  
   How difficult were these questions?  The questions were taken from the carriers’ own website. “The questions represented common, policy-oriented questions, concerning the proper way to bill Medicare in order to obtain payment.”  CMS officials were allowed to review all of the questions beforehand to make sure that they were not to difficult.  Medicare contractors were even told that they were going to be tested: “To facilitate our calls, CMS officials informed call center managers of our test.”  The CSRs knew exactly when they were being tested: “During our calls, we identified ourselves as GAO representatives and asked each CSR to answer our question as if we were the provider.”  The test, of course, was “open book”; the Medicare contractor had all of the written and electronic source materials necessary to answer the questions correctly.
   What did the GAO conclude was the cause of such poor performance?  Among other things, the GAO found that Medicare policies and regulations were so complex that neither Medicare CSRs nor CMS policy experts could understand them.
   “CMS officials acknowledged that some policies contain complex language. In addition, they told us that the agency’s goal of quickly publishing a policy that is technically correct may sometimes overshadow its effort to develop a clear and understandable document.” In other words, in some cases they purposely publish incomprehensible Medicare policies.
   The Medicare policies, in fact, are so complex that “CMS has retained a consulting firm to write explanatory articles about new Medicare policies.” Indeed, CMS acknowledges that “specialized training is required to understand the billing codes and modifiers that providers must include on their claim forms to receive payment from the program.”
    So, if the people whose full-time job it is to write and interpret Medicare policies have to hire consulting firms, and depend on those “specialized training” in order to understand the very regulations they have written, what is a busy practicing physician supposed to do?
   With more than 200 policy changes per year, CMS also indicated that it was nearly impossible for the Medicare CSRs to keep up with all of the changes: “They explained that the CSR position is particularly challenging because, in addition to learning how to access and utilize multiple information systems, these employees must stay abreast of Medicare policy changes to answer the broad range of inquiries received by the carrier call centers.”
   The scope of the problem is stunning.  In 2003, Medicare contractors responded to 21 million “provider” inquiries.  Using the same extrapolation technique that Medicare has used to recoup funds from physicians, the error rate would translate to 20,160,000 wrong answers to “provider inquiries” in 2003. Even using the GAO’s conservative estimate of the number of “policy-oriented” inquiries of 500,000 would mean that an astounding 480,000 questions were answered incorrectly.  The practical significance is that somewhere between 480,000 and 20,160,000 Medicare claims are wrongfully denied per year because of wrong information provided by incompetent Medicare bureaucrats.
   Consider what would happen if a local fast-food restaurant got the orders wrong 96 percent of the time.  The customer-oriented free market would never tolerate such poor performance. The anti-free market Medicare bureaucracy; however, is neither accountable to its “beneficiary/customers” nor to its “slave” providers.  Thus, the Medicare bureaucracy not only tolerates poor performance, but judging from the way it monitors performance, it considers accuracy and competence irrelevant.
   CMS’s principal oversight tool is the carrier performance evaluation (CPE), carried out by specially trained CMS review teams.  Here is what the GAO had to say about the criteria CMS uses to evaluate CSR responses to “provider” inquiries: “We have found that the CPE evaluation criteria are not designed to verify that CSR’s responses to providers are accurate.” In fact, CMS claims that evaluating the accuracy of CSR responses is not in their job description: “CPE evaluators are not required to evaluate the correctness of responses provided by a CSR; rather they are expected to ensure that the carrier has a system in place to monitor calls.
   So what do CMS review teams consider most important in evaluating CSR responses to provider inquiries?  Incredibly, the tone and volume of the CSR’s voice, and other toady things designed to dispense with the call more quickly, were given top priority in assessing CSR performance: “We observed that a CPE review team concentrated on procedural items such as how long a caller was kept on hold, rather than on whether the information provided was correct and complete.”  This is not surprising, as “CMS requires that CSRs be evaluated on customer skills—such as vocal tone, volume, and politeness.”  Therefore, if the CSR answers your call completely inaccurately, yet quickly, in a pleasant voice, and at the proper volume he is considered to be doing a good job.
   Even if CMS officials wanted to evaluate the accuracy of CSR responses, lack of expertise and a definition of the term “accurate” would prevent them from carrying out this task: “We reported in 2002 that CMS’s definition of what constitutes accuracy is neither clear nor specific.”  Also, “…CMS has not revised the definition.”  Only government bureaucrats could get away with guaranteeing that they receive a positive job performance evaluation by not defining the term “accuracy” when discussing the information provided to callers.
    As the GAO recognizes, “Without such guidance or other criteria linked to measurable outcomes, the carrier has little basis to evaluate the correctness and completely of CSR’s responses to policy oriented questions.”  Just imagine going to a physician and asking her, “Is this information accurate?” and she responds, “That depends upon what one means by ‘accurate’”.  My suspicion is that the local medical society would have serious problems with that physician’s response to such a patient inquiry.  Additionally, “CMS officials have recently told us…that in many instances, CPE evaluators do not have the expertise to evaluate the accuracy of CSR’s responses.”
    Moreover, following the scathing 2002 GAO report, CMS made no attempt to even make it look as if it was monitoring the performance of CSRs.  “In fiscal year 2002, only one carrier call center had a CPE covering provider telephone inquiry.  Not one CPE was performed in fiscal year 2003.” The conclusion that CMS considers accuracy and competence to be irrelevant is inescapable.
   Why any physician would continue to “participate” and suffer at the hands of such an incompetent bureaucracy is incomprehensible.7
   Since the passage of Medicare in 1965, there have been and still are some members of the Association of American Physicians and Surgeons (AAPS) who work within the AMA in order to help bring about the changes necessary to improve health care and benefit both the physicians and patients.  By the time the Medicare law had been passed, it was becoming more apparent that the AMA was not changing its direction.  Indeed, over the past fifty years the AMA has followed a slow, steady progression towards centralized health planning with Federal control of the practice of medicine.  For that reason, AAPS has over the past twenty five years begun to separate itself more from the AMA.  Rather than criticizing the organization, AAPS has most often elected to focus on specific issues, including the influence of the Joint Committee on Accreditation of Healthcare Organizations (JCAHO), changes in medical ethics, health planning, and physicians’ fees.
   The basic Non-Participation Policy of AAPS has remained unchanged in principle.  After passage of Medicare, AAPS distributed a Non-Participation Kit, including a sign for the office (“I am not a government doctor”) and a number of pamphlets, such as “’Hobson’s Choice’ or Non Participation?” by Executive Director Harry E. Northam; “The Heartless Hoax Called Medicare” by Frederick B. Exner, M.D.; “Participate in Medicare? Not me” by Robert England, M.D., and “Why I Never Did, Cannot, and Never Will Accept Government Dominated Insurance” by Walter W. Sackett, M.D.  Three letters were sent to all 185,000 American physicians by Presidents E.E. Anthony, M.D. and Thomas L. Dwyer, M.D., the last with the headline “It is estimated that already more than 50,000 doctors have made their firm decision not to participate in Medicare, although the socialized medical program does not start until July 1, 1966.”
   Dr. Dwyer wrote: “A majority is not necessary to remain free.  AAPS is numerically a comparatively small organization.  However, in its zeal to preserve good medical care, freedom, and constitutional government, and its unswerving adherence to principle, it has no peer. Many right causes have been won without large numbers or a majority.  Only about one-third of the colonists favored complete independence from Britain.  They achieved their noble purpose because they were right.  One-third of the nation’s ethical physicians can win this battle over regimentation and tyranny.” 8 
   Quoting Dr. Anthony’s Presidential Address, Dr. Dwyer continued, "At the present time, doctors have a choice. It is a choice between collaboration and refusal to participate.  Since it is legal, ethical, and moral for doctors to refuse to participate in this program, which will eventually hurt every man, woman, and child in this land for longer than any of us can foresee, and since Congressman Wilbur Mills (D-AR) plotted our course when he stated that the program cannot succeed without the willing, intelligent cooperation of doctors, this doctor takes his stand alongside of his patients and his Nation, I say for myself only, I will continue to care for my patients on the same basis and in the same conscientious manner that I’ve cared for them for over 30 years. I will not participate in this unholy, political scheme to increase government control over all of us.”
   In a letter to members dated October 4, 1965, Dr. Anthony expressed a fervent hope that the AMA House of Delegates would pass a Non-Participation resolution at the special session called for October 2-3, 1965.  “This wise act by the AMA would give a virtual assurance of the success of Non-Participation in Medicare.” 
    This hope was never realized.  “After the AMA leaders quelled a move by its members to boycott Medicare, it made sure doctors would benefit from the new national program…Medicare became a pipeline of money for doctors and hospitals.”9
   Forty five years after Medicare became Federal law it appears that the program is more of a boondoggle than could have been imagined by many Americans. As we have seen, there were those who recognized the problems with Medicare at the time that it was being debated and discussed in Congress; however, President Johnson and his supporters were bound and determined to see that this would become the law of the land, even to the point of pressuring insurance companies to stop offering coverage to their elderly customers to insure that they would be forced to take part in the program.
   If a program has sufficient merit, that merit should be obvious enough to the public that those who are eligible for such services would want to participate, rather than being forced to take part.  Forcing those over 65 to take part in Medicare gives the strong indication that even the government does not truly see the merit of this program, but is concerned rather with its own agenda, regardless of whether or not that agenda benefits the participant or not.
   Telling seniors that they must “take the Medicare plan and like it” (which is essentially what the government is saying) certainly calls into question whether the government is concerned with best interests of the patient.  Fortunately, there are options available.  A patient can find a “third party free” physician, sign an “opt out” contract, and pay for medical services directly to the physician.   For more information about this option, I invite you to check out  and see for yourself.
   Quality medical care and a supportive doctor-patient relationship should be minimum standards for all Americans.  The “Third Party Free” option allows Americans to choose the physician and medical care which is best for them, knowing that the physician is not beholden to either Medicare or any insurance company.  There are choices available.  The question is, “Which choice will you make?”

                                                              End Notes

1) E.E. Connors and L.O. Gostin “Health Care Reform—A Historic Moment in U.S. Social Policy” JAMA 2010:303:2521-2522
2)Edward R. Annis Social Security Administration Memoir: Oral History Research Office at Columbia University, Microfiche #1, Series VI
3)NPR “Medicare and Medicare Turn 40” Most Requested Transcripts, National Public Radio July 28, 2005
4)Jane M. Orient (ed.) “Medicare and the Destruction of Freedom in Medicine: Recollections of Dr. Edward Annis” Journal of American Physicians and Surgeons Winter 2008:(13)4 117-119
5)U.S. General Accounting Office, Medicare: Communications with Physicians Can Be Improved, GAO-02-249 Washington, D.C.: GAO; February 27, 2002 Available at
6)U.S. Government Accountability Office Medicare: Call Centers Need to Improve Responses to Policy-Oriented Questions from Providers GAO-04-669 Washington,  D.C.: GAO; July 2004 Available at:
7)L.R. Huntoon “Medicare: Incompetence-Based Bureaucracy” Journal of    American Physicians and Surgeons Winter 2004:9(4) 102-103
8)Thomas L. Dwyer Personal Correspondence November 15, 1965
9)Charles Pavey et al. “Fighting to Preserve Private Medicine: the Role of AAPS” Journal of American Physicians and Surgeons Spring 2003:8(1) 19-25


Edward R. Annis Social Security Administration Memoir: Oral History Research Office at Columbia University, Microfiche #1, Series VI

R.E. Burnett “The Insurance Mandate in Peril” Wall Street Journal (April 29, 2010)

E.E. Connors and L.O. Gostin “Health Care Reform—A Historic Moment in U.S. Social Policy” JAMA 2010:303

Thomas L. Dwyer Personal Correspondence November 15, 1965

L.R. Huntoon “Medicare: Incompetence-Based Bureaucracy” Journal of    American Physicians and Surgeons Winter 2004:9(4)

Jane M. Orient (ed.) “Medicare and the Destruction of Freedom in Medicine: Recollections of Dr. Edward Annis” Journal of American Physicians and Surgeons Winter 2008:4(13)

Charles Pavey et al. “Fighting to Preserve Private Medicine: the Role of AAPS” Journal of American Physicians and Surgeons Spring 2003:8(1)

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